China’s One Belt One Road initiative big opportunity for Sri Lanka: Standard Chartered Bank

Sri Lanka is already benefitting from China’s major One Belt One Road (OBOR) initiative and given its strategic location the country has great potential to gain much more, Standard Chartered Bank, a leading international bank with an extensive global footprint, declared yesterday.

“Historically Sri Lanka has been part of the old silk route hence it has enjoyed a longstanding relationship with China. However, this has strengthened and accelerated in a very visible way especially on the infrastructure side during the past six to seven years,” Standard Chartered Bank CEO Jim McCabe said. 

He said the Colombo International Container Terminal, the Port City, the proposed public-private partnership to revitalise the Hambantota Port and the development of the airport were “evidence of OBOR initiatives in action already in Sri Lanka.”

“Overall OBOR is a major and important initiative and Sri Lanka will see an even greater increasing role in it,” McCabe told a roundtable discussion in Colombo featuring a group of visiting journalists from China and Hong Kong as part of the bank’s OBOR roadshow. 

Around 10 journalists are touring South Asian countries included in China’s new Silk Road plan. Standard Chartered Bank China Financial Markets Head Wesley Yang and Belt and Road Strategy Execution Team Corporate and Institutional Banking Executive Director Sebastian Er accompanied the team of journalists. 

McCabe said given its longstanding presence in the major regions covering the OBOR - Africa, South Asia, Southeast Asia and the Middle East - and vast knowledge and expertise, SCB is in a position to lead and coordinate with a broad section of potential Chinese investments into Sri Lanka. SCB has a presence in 45 countries within the OBOR, which accounts for 67% of the bank’s global footprint.

“We are well positioned to support Sri Lanka to expand its economic relationship with China as a trusted and experienced partner,” McCabe said, adding that most large infrastructure projects to date have been Government-to-Government negotiated and the second wave of investments will be private sector driven with a PPP focus and the bank sees greater opportunities in it to extend not only financial support but other required expertise. 

He said an improvement in the ease of doing business as well as overall competitiveness as an investment and manufacturing location will see higher Chinese and other global investments in Sri Lanka to ensure it fully benefits from its strategic geographic location. 

Wesley also identified Sri Lanka as an important location in South Asia for OBOR, which links China with Europe and accounts for 63% of the world’s population and 29% of global GDP. Sri Lanka’s potential to be a hub for Chinese industries to serve the South Asian and African markets was emphasised. Last year SCB financed around 40 OBOR investments and initiatives. 

He recalled that during the Heads of Governments Summit on OBOR in Beijing in April, China had emphasised that the initiative is the biggest contributor to globalisation and global growth. Sebastian pointed out that OBOR was a huge initiative with a wide range of benefits shared among participating countries including Sri Lanka.